Asian stockmarkets were until recently big fans of the “decoupling” theory: the notion that Asian economies can shrug off an American recession. This week’s plunge in shares, taking the MSCI Emerging Asia Index down by 25% at one point from its October high, suggests they have changed their minds. But the fact that Asian markets have not decoupled does not necessarily mean that their economies will follow America’s over a cliff.

Decoupling was always a misnomer, seeming to imply that an American recession would have no impact on Asia. In fact exports and hence profits would certainly be reduced. The pertinent argument is that they would be hurt by much less than in previous American downturns.

As well as hitting exports, America’s troubles could affect Asia through various financial channels. Asia’s exposure to the subprime mess is thought to be much smaller than that of American or European banks. Even so, Chinese bank shares tumbled this week on rumours that they would have to make much bigger write-downs on their holdings of American subprime securities. And if stockmarkets slide further as global investors flee from risky assets, this could dampen business and consumer confidence in the region.

Some Asian economies are more vulnerable than others: Singapore, Hong Kong and Malaysia have exports to America equivalent to 20% or more of their GDPs, compared with only 8% in China and 2% in India. There are already some ominous signs. Singapore’s exports to America are down by 11% over the past year, while Malaysia’s fell by 16%. Exports to other emerging economies and to the European Union surged, so total exports still grew by 6% in both economies. But that was much slower than at the start of the year, and the worry now is that demand from Europe has started to flag.

The growth in China’s exports to America slowed to only 1% (in yuan terms) in the year to December from over 20% in late 2006. So far the impact on GDP growth has been modest. Figures on China’s fourth-quarter GDP are to be published on Thursday January 24th and most economists expect growth to slow to a still healthy 9-10% this year.

China’s economy would probably still expand by around 8-9% even if export growth dried up. During the 2001 American recession China’s GDP barely slowed. In contrast, Hong Kong, Singapore, Taiwan and Malaysia suffered full-blown recessions. America’s recession this time is likely to be deeper than in 2001 and Asia is now more integrated into the global economy. Doomsters conclude, therefore, that these economies could be hit harder this time.

The main reason to be more optimistic is that domestic demand (consumer spending and investment) is likely to remain strong and governments have more flexibility. Last year, despite a slowdown in America’s imports, most Asian economies grew faster as domestic demand speeded up. Robert Prior-Wandesforde, an economist at HSBC, says that those who argue that Asian economies cannot decouple from America are ignoring the fact that they already have. Take Malaysia: exports to America plunged, yet its GDP growth quickened from 5.7% at the end of 2006 to 6.7% in the third quarter of last year.

Filipinos have “a very special problem” in recalling, Ateneo de Manila University president Bienvenido Nebres, S.J. observes. “It is not just wrong memories. It is the lack of a national memory… The consequence is, we tend to live in a perpetual present. We have little collective memory of the past and thus we can not see well into the future.”

In his novel “1984,” George Orwell depicted a country where citizens thrust into a “memory hole” anything that crossed the whim of rulers. As “memory holes” shredded remembrance, wrong became right, lies replaced truth, and freedom turned into slavery.

Like malign genies, blotted-out memories don’t stay bottled up. They deform daily life. Thus, Imelda Marcos insists that Ferdinand Marcos’ dictatorship was the “most democratic period in our history.” The communists claim that “majority of (pogrom) victims decided to continue their work,” even praising the carnage. Estrada? Well, some days he can’t recall if his name is Jose Velarde.

All the hullaballoo about the 50th anniversary of SM (see SM through half a century), oddly enough, never mentions how salespeople remain contractual, and have had their contracts reduced to 3 months instead of 6 months as before. As the different political groups start marshaling their forces in preparation for the political engagements to come -whether a referendum campaign for or against constitutional amendments, or for the 2010 elections- the labor vote will be courted.

Yet the labor force, perhaps well-organized for certain unions, remains relatively small and if the May 1 mobilizations are any guide, seem to be shrinking. Unions didn’t prevent the collapse of certain industries, such as textile factories, have remained static in others such as the transport industry, and has no presence in growing ones such as call centers or the hi-tech manufacturing ones; they can’t have a presence in other countries yet sympathetic groups have been marginally successful in terms of mobilizing the OFW vote (potentially immense).

For example, would any effort to mobilize contractual workers at SM result in anything but opening up more contractual jobs? A strike would simply create huge lines for other citizens eager for any sort of SM-related job. Workers picketed PLDT for months but the country shrugged off the news, even when some of the workers claimed they were assaulted.

As entrepreneurship is encouraged, so will an anti-union mentality. And the unions themselves, how can they muster the clout necessary to cater to their members’ needs, when unemployment is so high, which makes any kind of employment desirable and permanent employment a losing proposition for most employers?

At the Kapihan sa Sulo media forum Saturday, Bataan Gov. Enrique “Tet” Garcia unveiled what he described as a “workable proposal” for Cha-cha through a second PI.

The Union of Local Officials of the Philippines (ULAP), he said, is “seriously considering [another] people’s initiative in proposing amendments to the Constitution to change the present [bicameral] Congress into a unicameral legislative body. That’s all.”

Garcia said that the presidential form of government “shall be maintained to uphold the right of voters to directly elect their chief executive.”

Cities reel from unseen IRA cuts suggests one motivation for amendments moves: the expenses of the 3 year term and frequent elections, a business class increasingly able to say no to political demands, at least during campaign season, may be conspiring to push local government leaders to pursue brinkmanship in terms of constitutional changes. The different proposals emerging (trial balloons, as I’ve said) all seem to have gotten the hint from last year’s Cha-Cha debate: no one seems to be seriously proposing parliamentary government, but having thrown in the towel as far as trying to scrap the presidential system is concerned, unicameralism and federalism are being put back on the table.

Last August, in Newsstand, John Nery wrote this, concerning Juan Miguel Zubiri:

He has filed an absurd counter-protest against rival candidate Aquilino “Koko” Pimentel III before the Senate Electoral Tribunal, contesting the results of a jaw-dropping 73,000 precincts. (That’s one-third of the entire country.)

I do not know if the SET will give his counter-protest due course; considering that Pimentel didn’t even have enough campaign funds to show more than a handful of TV spots featuring top celebrity endorser Angel Locsin, the claim that he cheated massively is preposterous.

But Zubiri does not need to prove his allegation of election fraud. All he needs to do is tie up the SET in an interminable recount. Pimentel, who believes he was cheated in 2,680 precincts in a total of seven provinces, is confident that the review of election returns he is contesting would be completed in half a year or so. Zubiri’s protest, on the other hand, would take years to resolve.

Redemption? More like a ruthless gaming of the system. The “Senator from Maguindanao” has cynically exploited the limitations of our election rules, to hold on to his job.

Now that the ballot boxes are being opened for revision (examination to establish correctness), it has even become clearer that all accusations made against Zubiri (and this administration) regarding manipulation of election results in many parts of Mindanao were true.

For how can you explain (a) empty ballot boxes? (b) Ballot boxes containing ballots filled up by one distinct handwriting only? (c) Ballots inside those boxes without the security seals? It’s clear as day, cheating was done!

As expected, the winning senator will not easily abandon his post. That was part of the sham: to be proclaimed as fast as possible because they know that election protests are decided only after soooo looong! Zubiri is now counting on that proven way to cling to a stolen post.

Hence Lakas-CMD projecting Zubiri as one of its spokesmen, as the party wrestles with its lack of real presidential timber, and the “going on leave” of the President’s son, and fresh rumors of the Speaker being toppled when the House resumes its sessions.

If we are to look closely at the things that work for us — private initiative in providing services for those who can afford them, courage and determination to work overseas to make extra dollars, contributions by the sectarians in moving education to a higher level (memo to UP on the celebration of your centennial: in five years, if not less, DLSU will overtake you as the pre-eminent Philippine university in terms of academic reputation, quality of graduates, and infrastructure. Accelerate reform now!), innovation and ingenuity in micro-level enterprises — is that in an environment where individual effort and contribution, fairness, excellence, and quality are observed, we do well.

Government’s role has expanded to that point where it has to intervene in everything. When it does that, it tends to stultify initiative and individualism and thus promotes mendicancy and stagnation. Instead of helping themselves, our people point the finger on others, and mostly on the government. Unfortunately, despite our socialist policy efforts, we cannot aspire to become a welfare state like those in Scandinavia. Given the mad scramble of these states to enlist foreign workers to support their retiring citizens, that system is flawed as well.

Methinks the government’s role in most public spheres is to generate consensus to reduce duplication of activities, support innovation, set fair standards. and then punish violators vigorously. This model will definitely work in business, education, sport — while the government can focus on securing our borders within and without, fostering healthy international relations, and promoting cultural identity.

Still, while we can go on theorizing models of government, it still bears to remember that without a proper culture of public service, any model is guaranteed to fail, as it is doing poorly right now in the Philippines. Change must come from the top, while those below must keep on pushing to ensure that happens. To be a truly “strong republic” the citizens will have to be “strong” in mind themselves.

132 comments

I think the above is the crux of the argument that Mr. cvj’s little mind simply fails to grasp. For him workers are OWED a fair treatment. In reality it is economics that is the ultimate scorekeeper.

While on the surface it seems that a “just” employee-employer relationship was worked out to varying degrees of success in most advanced societies, the truth is that this relationship for the most part EVOLVED just like any other social contract (some game theorists worked out a theory to model this evolution). What we see today is a snapshot of that evolution (it is still on-going and will most likely still continue to change). It didn’t come about out of some altruistic objectives in either party. It simply evolved to fit the economic environment — supply/demand, politics, etc.

Ganun talaga buhay. Just as the wondrous variety of life we see today is but a mere snapshot of a walang-personalan and no-good-intentions-meant evolution process, that social contract between worker and employer we see today (regardless of how dysfunctional, unjust, or generally not nice we perceive it to be) is how things turn out given the environment we find ourselves in.

The reality is a far cry from Mr. cvj peachy La-La Land of heroic union leaders and cringingly benevolent owners of business enterprise.

Sadly, you still don’t get it do you…akala ko pa naman, magaling ka…DIDN’T YOU SEE WHAT I JUST SAID A FEW COMMENTS AGO…BOTH SIDES HAVE THEIR SHARE OF THE BLAME. ANg hina mo pala. Ang problema ko talaga sa iyo, one sided ka. Ako at least, I see both sides having the problem. Ikaw, the masses have NO BLAME.

I have friends from all political colors and guess what, the stuff CVJ espouses is basically a very left leaning, almost communistic utopia. I have had long discussions with them on this. I always ask one simple question…how does one control the human instinct? It is instinctive for us to improve ourselves as individuals (unfortuantely, sometimes at the expense of others). Ang problema ko sa gusto ni CVJ, gusto niya, lahat maging robot. Ang running assumption niya, everybody has goodness in their hearts. Kaya nga, I’ve been telling him to get his head of the ivory tower. (tuloy akala niya nasa heaven na siya.:-) )

That’s the problem with ideologies (across the entire spectrum) and people who delegate their thinking faculties to these (instead of, well, THINKING for themselves).

The biggest mistake is assuming that coercion, inlfuence, or even force will mold people’s mind into an ideal that will make the system espoused by an ideology work.

So far only organised religion managed to succeed in the area of mind control on a massive scale. Although as we are seeing today, wider-spread application of critical thought is also stripping that power from religion (this is not to say that organised religion is not going away without a mighty fight).

Unfortunately the idea that people’s thinking processes can be changed to make an ideology work dominated history and resulted in the catastrophic loss of life in various wars and revolutions.

Human instinct (mostly geared towards self-serving purposes) evolved over millions of years. Ideologies, on the other hand, have been around only for thousands.

So which of the two will prevail?

For most people the answer to that question is a no-brainer. But for many small-minded ideologues like you-know-who, the reality merely escapes them.

No wonder he has no qualms about exterminating the “rich” and the “elites”. He thinks nobody will replace them as the people who are left behind (the poor and the downtrodden) are so nice and have everybody’s interest at heart that Utopia is at hand….wink wink

“Anthony, there lies our own tragedy of the commons. We all know that everyone will benefit from a healthier public sphere that comes with greater public participation. However, businessmen choose to focus only on their own little concerns which is why corruption and dysfunctional practices persists. ItÃ¢â‚¬â„¢s that Ã¢â‚¬Å“donÃ¢â‚¬â„¢t botherÃ¢â‚¬Â attitude. There is little sense of belonging to a larger polity.”

The positions of business organizations on labor and social issues, as well as on corruption, are a matter of public record.

True, a businessman can choose to complain but will time stand still by doing so?

For him workers are OWED a fair treatment. In reality it is economics that is the ultimate scorekeeper. – Benign0

In a just society, everybody whether rich or poor should be treated fairly. I’m astounded that i have to state something that’s supposed to be part of basic human decency. The logic of the market is not a substitute, nor is it an excuse for not doing the right thing. Even Adam Smith did not endorse such behavior.

Silent Waters, i don’t think the masa is blameless but you cannot point to their faults to excuse your own. That’s childish.

Anthony, it’s not a matter of just doing what’s within the law. There’s such a thing as civic responsibility. If you keep silent in the face of extortion, then the culprits will naturally get away with it. The businessmen are paying the price of apathy. And it’s not right to fix a mistake with another mistake, e.g. suppressing the legitimate right of labor to strike.

I am not trying to excuse the businessmen….I never indicated that at all. I am miffed at your defense of labor as if they’re blameless. I am not the only one to notice this as Benigno and Scalia noticed it too. That’s what we’re trying to point out. NOBODY IS BLAMELESS. Each have their faults.

It is only NOW that you have said explicitly that the masa is not blameless. BUT, I never used your defense of the masa as an excuse for the businessmen to do their shenanigans. Ikaw lang ang nag isip nun…maybe to parry my arguments?

Silent Waters, i’m not saying that you do not have a choice (to be or not to be apathetic). What i’m pointing out is that apathy is the wrong choice.

Individually, businessmen who take a don’t bother attitude may be better off because they can spend more time in their respective businesses. Collectively, [almost] everyone is worst off because the system remains corrupt and dysfunctional. It’s a society-wide failure of cooperation.

“Individually, businessmen who take a donÃ¢â‚¬â„¢t bother attitude may be better off because they can spend more time in their respective businesses. Collectively, [almost] everyone is worst off because the system remains corrupt and dysfunctional. ItÃ¢â‚¬â„¢s a society-wide failure of cooperation.”

Nice change of heart (although it is difficult to debate with people who move their goalposts as often as you do).

So now it is a society-wide “failure of cooperation”? That is to say the least a nonsensical concept.

“Failure of cooperation” implies that you still see “cooperation” as an expected SENTIMENT of a population rather than as an EMERGENT property of said population brought about by some kind of coming together of environmental factors not directly attributable to any one person or party’s sentiment.

Your expectation that a society “successfully cooperate” (and become an opposite of your bizarre concept “failure of cooperation”), the argument still seems to lead to this expectation of some kind of altruistic behaviour amongst elements of said population rather than it being an outcome of the collective dynamic of said population.

itÃ¢â‚¬â„¢s not a matter of just doing whatÃ¢â‚¬â„¢s within the law. ThereÃ¢â‚¬â„¢s such a thing as civic responsibility. If you keep silent in the face of extortion, then the culprits will naturally get away with it. The businessmen are paying the price of apathy. And itÃ¢â‚¬â„¢s not right to fix a mistake with another mistake, e.g. suppressing the legitimate right of labor to strike.

Again, I have yet to hear you find fault with the creative extortionists. I hear your solution to the problem lies in the hands of the ‘extortioned’ businessmen. Not with labor policing their own ranks, as these creative extortionists give labor a very bad name.

Aren’t you noticing my friend – you are acknowledging the wide-scale damage caused by these creative extortionists, and yet your prescribed solution is for the victims to report their activities?!? Not even a hint of self-regulation on the part of labor?

why don’t you hold these creative extortionists accountable in the same way you want government officials accountable to the people?

and whoa, hold a second, you’re assuming something, my friend, that I am for suppressing the legitimate right of labor to strike. ****sound of buzzer**** Wrong.

May i remind you also that strike is also a legitimate form of bargaining leverage?

The right is there, but it doesn’t mean you have to exercise it.

How many labor-intensive companies have closed shop, thanks to the unwise exercise of this legitimate right to strike? But oh there’s a consolation – the enjoyment of exercising a legitimate right. The loss of a means of livelihood doesn’t matter; the exercise of a legitimate right is.

Motherhood statements like two wrongs don’t make a right don’t cut it in this world. We live in a world where there’s a lot of shades of gray. Sa kanya, black and white lang lahat, as if all decisions can only have pros or cons.

Di ko alam tuloy kung saan talaga nakatira yung tao. He enjoys the fruits of a democratic life but condemns the reason why there is such a life. Only in being able to do business and innovate is there improvement in human life. Di yung command economy na gusto niyang impose sa lahat. (Baka gusto niya kasi maging leader nun? Shades of JOMA talaga).

I am sure he will rebut your argument by saying it’s the businessman’s fault that he closed shop. Kung pakiramdam niya di kumikita eh? That’s going to be his argument. What he doesn’t even realize that productivity is important and sad to say, the productivity of labor in the Philippines (at least in manufacturing except for a few companies) suck.

Gusto ni CVJ, reward mo muna ang labor bago sila gagalaw. and in fact, kung puede nga, di sila gumalaw, mas ok! Then he wonders why businessmen have a hard time making manufacturing work in Manila and prefer smuggling na lang. Trading requires less people and you need to deal with less headaches.

Why do you think China is productive? Is it because they’re paid less? NOOOO! They’re productive because even if the total pay (including benefits of food and housing) of labor in China is at par with the Philippines, they produce more per worker! Tapos nagtataka siya bakit China is growing fast.

And speaking of pay in China, since the pay is at par with the Philippines, why doesn’t he condemn it anyway. Or baka naman di niya pupumanahin kasi China yun, communist party. Am sure a cop out statement like,why should we care about china since this is a Philippine blog will be par for the course.

Hanggang ngayon, he never answered why he doesn’t just come home and help in making the Philippines a better place if he really has the country’s interest at heart. Hindi yung kibitz lang nang kibitz. Pukol lang ng pukol, wala naman gagawin.

Benign0, just to clarify, it is not, as you mention, a “change of heart” since that is what i was saying from the beginning. Scroll up to my preceding comments (January 28th, 2008 at 8:02 pm and January 29th, 2008 at 8:29 am) where i mentioned our own tragedy of the commons.

I also subscribe to the basic tenet of economic thought that people respond to incentives and recognize that it is the aggregate of such responses [to price signals] that make up the market system. However, we are not animals who can only see the meal in front of us. In fact, the ability to filter incentives is the the same habit of thought that entrepreneurs exercise when they forego present consumption to invest in future production. It only takes them to expand that mindset to cover political and social sphere, they will realize that what you denigrate as altruism is actually enlightened self-interest.

Not even a hint of self-regulation on the part of labor? – Anthony Scalia

I would like to refer you to the second paragraph of one of my earlier comments in this thread (at January 27th, 2008,9:23 pm) where i said…Government, labor and business should get together and have some give and take. Perhaps government should protect home grown businesses like yours, labor should avoid labor strike, while businessmen promise to keep their capital at home, i.e. avoiding capital strikes. Daanin sa magandang usapan.

I am just actually surprised that considering his upper management position in Singapore, you would think he would be less of an ideologue in the mold of the activists in Manila and be able to see more of the big picture..that the world DOES NOT OWE YOU ANYTHING. It’s up to us to take our place in the world. Whether rich or poor, white, yellow, brown or black, it’s doesn’t matter.

Sorry about that. i remember in one of his posts elsewhere in this blog cvj said that he is leading a multinational team. I thought at the minimum he’s a project or team manager. If not upper management, middle management

Ã¢â‚¬Â¦Government, labor and business should get together and have some give and take. Perhaps government should protect home grown businesses like yours, labor should avoid labor strike, while businessmen promise to keep their capital at home, i.e. avoiding capital strikes. Daanin sa magandang usapan.

DoesnÃ¢â‚¬â„¢t that qualify as a hint?

No, because its way too general. A broad statement covering all sectors. You’re playing it safe. There’s no mention of labor checking the excesses (like creative extortion) of its peers.

You’re always pointing out the wrong ways of businessmen. Why not single out labor for a change? Even just a hint of recommending self-regulation, but single out labor. Please